TaxTMI 
TaxTMI 
2009 (3) TMI 14
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....1 ('Act' for short). By the said notice dated 27-3-2008, the assessment for assessment year 2001-02 is sought to be reopened. 3. The petitioner is carrying on business of purchase / sale of shares on behalf of its customers as a sub-broker. 4. In the assessment year 2001-02, the petitioner had inter alia entered into two transactions for purchase and sale of shares of Zee Telefilms for and on behalf of its customers viz. Camelot Enterprises Private Limited ('Camelot' for short) and earned speculation profit of Rs.1,32,96,106/-. Admittedly, the said speculation profit has been paid by the petitioner to Camelot and the same has been assessed to tax in the hands of Camelot. 5. On 18-12-2003, assessment for AY 2001-02 under Secti....
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....und that M/s. Camelot Enterprises Pvt. Ltd. had earned speculation profit on sale and purchase of shares of Zee Tele films Ltd. at Rs.1,32,96,109/- from the following two transactions with M/s. Bang Securities Pvt. Ltd. The said shares were purchased by the assessee from the brokers M/s. Nirmal Bank Securities Pvt. Ltd. and M/s. Bang Equity Pvt. Ltd. Bill No.A/045/0144 Speculation dtd. 8-2-2001 Profit Rs. 66,16,960/- Bill No.A/044/0144 Speculation dtd. 1-2 - 2001 Profit Rs. 66,79,149/- Total Rs. 1,32,96,109/- The charging of margin money from the client is normal practice in the share trading business, however, on verification of aforesaid transactions, it was found that M/s. Bang S....
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....h M/s. Camelot Enterprises Pvt. Ltd. were fictitious; and thereby the assessee has transferred the profit of Rs.1,32,96,109/- arising to it to M/s. Camelot Enterprises Pvt. Ltd. (i) These are the two settlements where M/s. Camelot Enterprises Pvt. Ltd. has dealt with M/s. Bang Securities Pvt. Ltd. No transactions prior to or after the said period were there. (ii) The charging of margin money from a new client on big volumes made is a normal practice in the share trading business. However, it was found that no margin money was charged on the said transactions from M/s. Camelot Enterprises Pvt. Ltd. (iii) M/s. Camelot Enterprises pvt. Ltd. is the only client of M/s. Bang Securities Pvt. Ltd. where such a big p....
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....o another entity by restoring to colorable devices. An order u/s.143(3) of the I.T. Act was passed in the case of the assessee on 18-12-2003 determining loss Rs.11,68,69,750/-. In view of the facts discussed above it is clear that the assessee has failed to disclose fully and truly all material facts necessary for its assessment, and the assessee has transferred the speculation profit of Rs.1,32,96,109/- in respect of aforesaid transactions with M/s. Camelot Enterprises Pvt. Ltd. I have, therefore, reasons to believe that income for Rs.1,32,96,109/- has escaped assessment within the meaning of Section 147 of the IT Act". (V.J. Boricha) Asstt. Commissioner of Income tax, Central Circle-41, Mumbai. 7. The petitioner objected to....
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....f shares dealt by the petitioner as a sub-broker in the case in question is very high and the fact that in both these transactions there are only profits and no loss cannot be a ground to infer that income chargeable to tax has escaped assessment. 11. Moreover, from the aforesaid facts it cannot even remotely be considered that the declaration made by the petitioner was false or that the petitioner failed to disclose fully and truly all material facts as a result whereof it can be said that any income chargeable to tax has escaped assessment. In these circumstances, the reopening of the assessment after the expiry of four years from the end of relevant assessment year cannot be sustained. 12. The argument of the revenue that the trans....